BOARD01177

• Board Meeting Date: 7/26/1999
• Description: CF Section - Proposed Parity Test Revisions
• Board Meetings - Doc Type: Memo

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STATE OF COLOAADO

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Colorado Water Conservation Board
Department of Natural Resources
1 31 3 Sherman 51 reel
Denver, Colurado 80203
Phone: OOJ) 1.I(1(!-3..41
FAX: 003l t\fl(I-4474

Bill OWl'ns
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MEMORANDUM

Crl'gE. \\',li(lwr
["ecutill' Dirl'nor, D,",I.:
J'elt'f H. E\',lIl~
Dirt'nor, (WeB

TO:

Colorado Water Conservation Board Members

Bill Grcen, P.E., Manager ofPlanning'$V I \
Mike Serlet, P.E., Chief, Project Planning and constructiOjf_~

July 16, 1999

FROM:

DATE:

SUBJECT:

Agenda Item 8, July 26-27, 1999 Board Meeting - Water Project
Construction Loan Program - Proposed Parity Test Revisions

Introduction

This memo presents a recommendation for revisions to the Board's parity debt policy.

Discussion

At the conclusion of the discussion of the Town of Erie's request for parity at the January 27,
1999 Board meeting (January Agenda Item lOb.), the Board directed the staff to review the
current policy for granting parity on existing loans_ The current policy requires (among other
things) that the borrower's revenues, exclusive of tap and/or connection fees, be adequate to pay
for:

Operation and maintenance expenses,

Debt service on all existing loans having a lien on revenues,

Debt service on the proposed debt, and

Any payments to debt service reserve funds.

This is essentially the same thing as a debt service coverage ratio of 1_0, disallowing tap and lor
cOlmection fees in the revenue part of the debt service coverage equation.

The proposed revisions to the existing policy are shown on the attached sheet, which is a revised
version of the attachment to the Town of Erie memorandum for the January meeting. The
suggested revisions are: